Trump Announces Japan Trade Pact, Revises Trade Terms With Indonesia, Philippines

President Donald Trump met with Philippine President Ferdinand Marcos Jr. in the Oval Office. (Chip Somodevilla/Getty Images)

President Donald Trump late Tuesday said he had struck a trade pact with Japan, building on a series of trade-related developments ahead of an Aug. 1 deadline for tariffs to snap back to April 2 levels.

Trump reset tariffs on goods from Japan imported to the U.S. to 15%, which is lower than the 25% he threatened in a letter earlier this month. He said Japan had agreed to invest $550 billion “at my direction,” with the U.S. receiving 90% of the profit, and open its market to U.S. cars and trucks, rice, and other agricultural products. Further details—including whether there was any change in auto tariffs on Japan and the terms for investment—were not available.

Political consultants have been advising investors to brace for higher tariffs, even as the administration hammers out deals.

Earlier Tuesday, Trump offered details about a pact with Indonesia he first mentioned last week. While the tariff rate for imports from Indonesia will remain at the 19% rate announced last week, the Southeast Asia nation has now agreed to sell critical minerals and purchase Boeing planes, farm products, and energy from the U.S., Trump announced in a post on social media Tuesday afternoon.

As part of the framework for negotiating an agreement on reciprocal trade, Indonesia would purchase $3.2 billion of aircraft, $4.5 billion of soybeans, wheat, cotton, and other agricultural products, and $15 billion of oil and gas from the U.S.

While Trump didn’t specify which critical minerals Indonesia would supply, it is one of the largest producers of nickel—a critical component in electric vehicle batteries—in the world, according to the International Trade Administration. It also has rare earth minerals such as monazite and xenotime, which have defense and clean energy applications.

Additionally, Indonesia will impose no tariffs on U.S. goods.

“It is agreed that Indonesia will be Open Market to American Industrial and Tech Products, and Agricultural Goods, by eliminating 99% of their Tariff Barriers,” Trump wrote.

The 19% rate is lower than the 32% rate for Indonesia’s products that Trump originally announced on April 2.

New Trade Deal With Philippines

Trump also revealed a revised trade deal with the Philippines after a visit with President Ferdinand Marcos Jr. in the Oval Office on Tuesday.

Imports to the U.S. from the Philippines will have a 19% tariff rate, Trump posted on social media Tuesday afternoon. That is one percentage point less than the 20% rate Trump unilaterally imposed on goods from the Philippines in early July. But it’s still higher than the April 2 rate of 17%.

“He’s a very tough negotiator,” Trump said of Marcos, ahead of Tuesday’s meeting.

Marcos called the U.S. its “strongest, closest, most reliable ally.”

‘Rash of Trade Deals’ Coming Soon, Bessent Says. Tariffs Can Be Used for World Peace.

With just 10 days left before higher tariff rates kick in for many U.S. trade partners, Treasury Secretary Scott Bessent says the administration is “about to announce a rash of trade deals in the coming days.”

“A lot of these trade deals are going to include substantial investments in the U.S. whether it’s autos, semiconductors, and pharmaceuticals,” he told Fox Business Tuesday morning.

Trump has said he considers a letter to a trade partner in which the U.S. unilaterally sets the new tariff rate to be a “deal.” He announced more than two dozen such “deals” in early July with rates ranging from 19% to 50%. He added that he would set a rate of “a little over 10%” for 150 smaller countries.

While the 19% rate for Indonesian imports is relatively low, Brazilian products face a rate of 50%. Trump called out the South American nation for the trial of its former President Jair Bolsonaro, a Trump ally who is facing charges of attempting a coup.

Bessent added that the Aug. 1 deadline is “a pretty hard deadline.” However, countries can continue negotiations even after the rates take effect.

As for Indonesia and the Philippines, the two countries have agreed on a framework for negotiating an agreement on reciprocal trade, which they will finalize “in the coming weeks,” according to the White House.

Tariffs can be used not only for economics, but also “for world peace,” Bessent said. He was referring to the U.S.’s plan to impose secondary tariff rates of 100% on imports to the U.S. from any country that does business with Russia if no peace deal is reached by early September.

Pharma Invests in U.S. to Counter Tariffs, Jeep Maker Swings to Loss

Trump’s plan to introduce tariffs as high as 200% on pharmaceuticals is spurring companies into action.

London-listed AstraZeneca , known for its treatments for cancer, diabetes, and Covid-19, said Monday that it will invest $50 billion by 2030 to manufacture drugs in the U.S. It is the latest sign that Trump’s tariffs are changing the way companies do business.

The spending includes a new multibillion-dollar center in Virginia focused on making drugs for chronic diseases, including weight-loss treatments. It will also expand facilities in Texas and Indiana, and build new ones in Massachusetts and California.

Investors are still waiting on news of possible trade deals with the European Union and India, which White House officials have said may be coming. The Aug. 1 deadline for deals is rapidly approaching next week—after that, the temporary reductions in tariffs will expire and rates will go up.

Certain sectors other than pharmaceuticals also face higher levies on top of the threatened across-the-board tariffs, particularly automobiles. Stellantis , the owner of the Jeep and Chrysler brands of cars, said Monday that earnings took a hit to the tune of $350 million from U.S. tariffs in the first half, pushing the company into a loss. The vehicle maker faces a 25% duty on cars imported from overseas.

Its U.S.-traded shares are down 30% since the start of the year but were rising 0.6% in late morning trading.

Write to Anita Hamilton at anita.hamilton@barrons.com and Brian Swint at brian.swint@barrons.com